December 19, 2008

Sumitomo Corp., Japan's third largest trading company, plans to increase its wheat sales in Asia after obtaining an export permit from Australia.

Sumitomo will export Australian wheat to Japan in January for the first time after obtaining the permit last month, said Kurosaki Hiroyasu, general manager at Sumitomo's Grain & Oils Department.

Sales of Australian wheat to Japan are expected to increase if government import controls are eased, he said. The Ministry of Agriculture, Forestry and Fisheries of Japan, which controls imports and domestic sales of wheat to protect local producers, is said to be considering increasing wheat imports next year.

Sumitomo also plans to start exporting wheat to China, as increasing income and changing diets boost China's demand for bread and cakes, said Kurosaki.

Kurosaki said the company will also export wheat to other Asian markets as it expands its business.

Sumitomo aims to expand the wheat business in fast-growing Asian markets and to be a major player in the marketing of east Australia's grains, said Kurosaki, adding that Australia's proximity to importing Asian countries give it a competitive edge against US and Canadian grain exports.

Australia dropped its monopoly system for wheat exports this year, allowing other companies to make shipments. Sumitomo is the only Japanese trading house that owns grain storage and export facilities in Australia.

Kurosaki said the company plans to purchase grain elevators from other companies to expand its network of collecting and marketing.